Netscape v. Valueclick: Summary judgment granted in part, denied in part, granted in part, denied in part, granted in part, ... (etc.).
On January 29, 2010, Judge Ellis issued a comprehensive, 49-page opinion (available here) on the parties’ motions for summary judgment in Netscape Communs. Corp. v. Valueclick, Inc., et al., Civil Action No. 1:09cv225 (E.D. Virginia). Plaintiff Netscape claims that the Defendants willfully infringed U.S. Patent No. 5,774,670 (the ‘670 Patent), known as the “Internet cookie patent.” After several months of discovery, the parties filed for summary judgment on twelve separate issues. Specifically, the parties filed cross-motions on:
(1) invalidity based on the on-sale bar of 35 U.S.C. § 102(b); and
(2) whether plaintiff waived its right to enforce the ‘670 patent.
In addition, Netscape moved for summary judgment on the Defendants’ affirmative defenses based on:
(3) invalidity based on public use of the invention under 35 U.S.C. § 102(b);
(4) invalidity based on anticipation;
(5) invalidity under 35 U.S.C. § 102(f) based on misjoinder or nonjoinder of inventors;
(6) equitable estoppel; and
(7) federal preemption of defendants’ state law counterclaims of fraud, misrepresentation and unfair competition.
Separately, Defendants moved for summary judgment on:
(8) invalidity of three claims based on indefiniteness;
(9) laches;
(10) non-infringement of claims 1-8 under any claim construction;
(11) non-infringement of all claims under defendants’ proposed claim construction; and
(12) willful infringement.
In its ruling, the Court took the opportunity to clear out many issues and gave each side partial victories, but left the core issues for resolution at trial, which is set to begin on April 26, 2010.
For plaintiff Netscape, Judge Ellis dismissed the defenses of equitable estoppel, public use, inventorship, and granted summary judgment on defendants’ state law counterclaims, but denied Netscape’s motion to dismiss the anticipation defense.
For defendants, Judge Ellis invalidated claim 1 of the ‘670 patent based on the on-sale bar and dismissed the claim of willful infringement, but denied defendants’ motion on their defenses of indefiniteness, waiver, laches and application of the on-sale bar to the remaining claims of the patent and denied defendants’ motion based on non-infringement.
Although the rulings were based mainly on the absence of supporting facts or the existence of disputed material facts, Judge Ellis reached several notable legal conclusions.
- As to the “on-sale bar,” Judge Ellis concluded that the cookies-functional web browser was "ready for patenting" prior to the critical date of the patent-in-suit even though the web browser was not released until after the critical date. Judge Ellis found “the undisputed record evidence shows that draft cookies source code existed [prior to the critical date], [and thus] the second [Pfaff v. Wells Elecs., Inc., 525 U.S. 55 (1998)] prong is satisfied. Moreover, with respect to inventions involving computer code, Pfaff simply requires complete conception of the invention, not the source code's actual completion, provided that there is an enabling disclosure that would allow one skilled in the art to complete the invention."
- With respect to willful infringement, Judge Ellis noted that “plaintiff's claim is based on defendants' use of the cookies technology following the initiation of the instant suit, as defendants had no pre-litigation knowledge of the '670 patent. While not dispositive, plaintiffs’ decision not to seek a preliminary injunction has been deemed relevant… Moreover, while not all of defendants' arguments are meritorious, defendants do present legitimate defenses and credible invalidity arguments.”
- Finally, Judge Ellis held that defendants’ state law claims for fraud, misrepresentation and unfair competition based on plaintiff's acts of enforcing its patent rights were preempted by federal patent law: “[A]lthough clear and convincing evidence establishes that the § 102(b) on-sale bar invalidates claim 1 of the [patent-in-suit], this conclusion does not necessarily demonstrate objective baselessness, as questions of infringement and invalidity remain as to [other] claims.”
